Ad Hoc Arbitration between Nord Stream 2 AG and the European Union
European Union Memorial on jurisdiction and bifurcation
1. This Memorial on Jurisdiction and Request for Bifurcation (`Memorial') is filed by the European Union in accordance with the Procedural Calendar in Annex 1 of Procedural Order No. 1 of 24 April 2020.
2. In this Memorial, the European Union (`EU') raises two jurisdictional objections.
3. First, the European Union will explain (in Section 2.1, below) that the present Arbitral Tribunal has no jurisdiction because of lack of consent: The European Union's consent to international arbitration under the Energy Charter Treaty (`ECT') is conditional upon compliance with the fork-in-the-road clause in the ECT. Given that Nord Stream 2 AG ("NSP2AG" or the "Claimant") has already brought court proceedings before the Court of Justice of the European Union with regard to the adoption of Directive (EU) 2019/692 of the European Parliament and of the Council of 17 April 2019 (the "Amending Directive"), NSP2AG is prevented from bringing a parallel dispute before the present Arbitral Tribunal under the ECT.
4. Second, the European Union will explain (in Section 2.2, below) that the Arbitral Tribunal lacks jurisdiction ratione personae. NSP2AG's claims relate to Directive (EU) 2019/692, which amends Directive 2009/73/EC of 13 July 2009 concerning common rules for the internal market in natural gas (the "Gas Directive" or "Third Gas Directive"). The Amending Directive can impose no obligations on the Claimant. Therefore, the alleged breaches of the ECT, and the alleged ensuing damages, would not result from the Amending Directive. They could only result from measures which the Member States may or may not take within the scope of the margin of discretion accorded to them when they transpose and implement the Amending Directive. Those measures of the EU Member States would not be attributable to the European Union under international law. Nor would the European Union be otherwise responsible under international law for any alleged breaches of the ECT resulting from those measures, because those breaches would not be required by EU Law.
5. After setting forth the jurisdictional objections, the European Union makes a Request for Bifurcation (Section 3, below). The European Union respectfully requests that the Tribunal decide as a preliminary matter the jurisdictional objections set out by the European Union in this submission before considering the merits of the claims brought by NSP2AG, as provided for in Article 21(4) of the applicable UNCITRAL Rules. The European Union will demonstrate that the conditions for bifurcation are met.
2. Jurisdictional Objections
2.1 the Claimant Has Already Elected a Different Jurisdiction for its Claim
2.1.2 Interpretation of the Fork-In-The-Road Clause in Article 26(3)(B) ECT
2.1.3 the European Union's Interpretation of the Fork-In-The-Road Clause in the ECT is Consistent with past Arbitral Awards
2.1.4 the Application for Annulment Before the Court of Justice of the European Union and the Present Arbitration Proceedings Have the Same Fundamental Basis
2.1.5. Past Arbitral Awards that Applied the "Triple Identity Test" Can be Distinguished from the Present Case
2.1.6 The Present Dispute Before the ECT Tribunal and the Dispute Before the Court of Justice of the European Union Meet the Triple
2.2 The Arbitral Tribunal Lacks Jurisdiction Ratione Personae to the Extent that the Breaches of the ECT Alleged by the Claimant Result from Measures of the Member States for Which the European Union is not Responsible Under International Law
2.2.2 The Measures Challenged by the Claimant
2.2.3 The EU Directives Challenged by the Claimant Impose No Legal Obligation on the Claimant
2.2.4 Member States Have a Wide Margin of Discretion to Implement the Relevant Provisions of the EU Directives Challenged by the Claimant
2.2.5. The Alleged Breaches Would Result from Measures Which Are not Attributable to the European Union
2.2.6 The European Union is not Otherwise Responsible for the Alleged Breaches of the Ect in Accordance With International Law
3. Request for Bifurcation
3.2 the Applicable Rules
3.3 the Legal Standard
3.4 the Jurisdictional Objections Raised by the European Union Meet the Criteria for Bifurcation
3.4.1 the Jurisdictional Objections Are Substantial
3.4.2 Granting the Jurisdictional Objections Would End the Dispute or at Least Reduce the Proceedings at the Next Phase
3.4.3 Bifurcation is not Impractical
4. Relief Sought